Aviva Endowment surrender or keep

ukcarper

My current policy is going to be about 35% below target (without promise). So if OP’s is the same he will still get about £50k with promise. I suppose mine couldn’t have matured at a worst time although I am disappointed Aviva have reduced final bonuses again after doing it last July.

I would say the overall economy is in a much worst state than it was after the dot com crash

dunstonh

I would say the overall economy is in a much worst state than it was after the dot com crash

it is but recessions are not new and there are opportunities in all recessions and you have the recovery from that.

The sell of during this recession was far greater than the others. Hence why the bounce back was much quicker. Of course, going forward it is always an unknown. However, the recovery from last year has yet to feed its way through fully as Aviva did their last review based on October 09 figures which saw MVRs reduce and some terminal bonuses increase. Hopefully the next one will do the same. Although I dont expect them to jump too much as current levels are not dissimilar to Oct 09.

andyyorks

I'm in the process of surrenering my Aviva (originally GA) low cost endowment on the advice of my financial advisor. He didn't even look at any of the figures - just said that he could beat the returns with more flexible investment options now available. I've already some money invested in a Skandia investment platform on the advice of the FA - the money from the endowment is going in there. It'll hopefully return more than the interest on the mortgage.

ukcarper

What the OP has to do is work out how much he would save by surrendering policy and paying that amount of his Mortgage (if he can without any penalties).

That is 9 years paying £84pm. = £9072 + savings on Mortgage - any penalties.

Then compare that to what he is like to get at maturity bearing in mind that he might not get the 6% figure and that Aviva could remove promise.

£18053+ £6857+ £11050 = £35960 is the minimum he would get if Aviva do not remove promise and is likely to get more.

He could pay of the 19k but if his mortgage were at 4% he would save about £7k in interest

So as I said above he would save £9072 + £7000= £16000 which is almost the same as if he carried on paying so as far as I can see the only risk is that Aviva take way promise am I right dunstonh?

PS I am not a financial advisor just someone who has had one Aviva policy mature and has another about to.

mands68

Hi I wondered if any one could help?
We have two endowment policies which are due to pay out in October 2012. Has anyone had an endowment from Aviva ( Norwich Union ) that has paid out in the last few years?
We have considered selling them many times but have always been put off as they are supposed to make the most in the last few years!
I have spoken to an advisor at Aviva a few times regarding the measly amount they will be paying out but they just say they haven't got the bonus's on them yet so they will be more. I have no idea what bonus it will be and they cannot even give me the slightest idea.
We have one that is for £33,950 that they say is worth about £11,000. The other is for £23,000 that has a current fund value of £13,968.
If anyone can help with this I would be extremely grateful.

dunstonh

Has anyone had an endowment from Aviva ( Norwich Union ) that has paid out in the last few years?

Aviva have dozens of types of policies. Some with profits, some unit linked, some with different target growth rates, some with different timescales and different levels of charges. It isn't really safe to consider someone elses unless you know its identical to yours.

We have considered selling them many times but have always been put off as they are supposed to make the most in the last few years!

Thats a bit a generalisation. The potential is to make more in the later years but the there is just as much potential to make more loss as well (e.g. a 20% drop in year 2 only affects 2 years worth of premiums and you get x number of years after buying investments cheaper. A 20% drop at the end affects all the premiums (and prior growth) and there isnt time to make it up at the end.

I have spoken to an advisor at Aviva a few times regarding the measly amount they will be paying out but they just say they haven't got the bonus's on them yet so they will be more. I have no idea what bonus it will be and they cannot even give me the slightest idea.

The staff on the general aviva telephone line dont like telling people what final bonus has accrued to date. You typically have to push for it or if you have an IFA, get them to get it. There may also be a mortgage endowment promise value to add to it as well. Again, the telephone staff often dont even know that exists.

mands68

Thanks. It would probably be best to get an independant financial advisor. As far as I know we don't have any promise with our policies, I certainly can't see anything on the paper work

dunstonh

As far as I know we don't have any promise with our policies, I certainly can't see anything on the paper work

They dont go out of their way to tell you any more. If you check your 2001 and 2003 (or it could be 2004) statements, it will mention the MEP on there. I don't believe they have mentioned it again on future statements. The Aviva MEP is fully funded but its in Aviva's interests for people to surrender policies as then they dont have to pay the MEP value.

If you get an experienced person on the phone at Aviva they will know about it and tell you what your MEP maximum value is. They have the information on screen so it doesnt need looking up or referring to someone else. An inexperienced person will probably make noises like a caveman and fob you off.

mands68

Hi,
Thanks for your help.
I have just spoken to someone actually helpful for the first time.
One of our endowments is a guaranteed min cost end policy costing £43.64p a month , it's maturity date is Oct 2012. They have given me a current value of £19,881.52 this includes our bonuses of £8243.53 with a target amount of £33,950.

We do have an MEP of £4,150. After speaking to the advisor she said if our policy ended today the final bonus would be worked out that for every thousand ( not including bonus ) so I assume £11,679
we will get £60. So the great final bonus they have always sold me on works out about £660.

Obviously if we cash in or sell we lose the £4150. Do you think it is worth keeping?

barnabee

With only 21 months left I would keep it and get the MEP bonus. You also have the life cover element for the next 21 months ae well.